525 Chapter 10 HW

The standard hours allowed is ________. a. the direct labor-hours that should have been used to complete the planned output for the period. b. the direct labor-hours that should have been used to complete the actual output for the period. c. computed by multiplying the standard labor-hours allowed per unit by the planned output for the period. d. computed by multiplying the actual labor-hours per unit by the planned output for the period.

b. the direct labor-hours that should have been used to complete the actual output for the period.

When computing variable manufacturing overhead variances, the standard rate represents the ________. a. predetermined overhead rate. b. variable portion of the predetermined overhead rate. c. standard hourly pay rate for direct laborers. d. the amount of hours allowed for the actual output.

b. variable portion of the predetermined overhead rate.

Assume that direct labor-hours are used as the overhead allocation base. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance ________. a. will be favorable. b. will be unfavorable. c. cannot be determined without additional information.convert materials into the finished product. d. will be equal to zero.

b. will be unfavorable.

Most companies compute the materials price variance when raw materials are _______. a. received from suppliers and transported to raw materials inventory. b. withdrawn from raw materials inventory and used in production. c. ordered from suppliers. d. moved from work in process inventory to finished goods inventory.

a. received from suppliers and transported to raw materials inventory.

A flexible budget performance report for variable manufacturing costs shows _______. a. only the activity variances. b. both the activity variances and the spending variances. c. both the revenue variances and the spending variances. d. both the quantity variances and the price variances.

b. both the activity variances and the spending variances.

The standard quantity per unit defines the ________. a. price that should be paid for each unit of direct materials. b. total cost of direct materials that should be used for each unit of finished product. c. amount of direct materials that should be used for each unit of finished product including an allowance for normal inefficiencies, such as scrap and spoilage. d. amount of direct labor-hours that should be used to produce one unit of finished goods.

c. amount of direct materials that should be used for each unit of finished product including an allowance for normal inefficiencies, such as scrap and spoilage.

The standard quantity allowed is _______. a. the amount of an input that should have been used to complete the planned output for the period. b. the actual amount of input that was used to complete the planned output for the period. c. the amount of an input that should have been used to complete the actual output for the period. d. the actual amount of input that was used to complete the actual output for the period.

c. the amount of an input that should have been used to complete the actual output for the period.

Zeta Corporation is a manufacturer of sports caps, which require soft fabric. The standards for each cap allow 2.00 yards of soft fabric, at a cost of $2.00 per yard. During the month of January, the company purchased and used 25,000 yards of soft fabric at $2.10 per yard, to produce 12,000 caps. What is Zeta Corporation's materials price variance for the month of January? a. $2,000 F b. $2,000 U c. $2,500 F d. $2,500 U

d. $2,500 U Materials price variance = AQ(AP − SP) = 25,000 yards ($2.10 per yard − $2.00 per yard) = $2,500 U Because the actual price of $2.10 per yard is greater than the standard price of $2.00 per yard, the materials price variance is unfavorable.